Allu Aravind Babu, CHENNAI V. ACIT, CHENNAI

MA 309/CHNY/2016

• Counselvise Citation: [2017] 124 COUNSELVISE.COM (IT) 5397 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 16 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 09-02-2017
• Appeal Filed By: Assessee
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 23-11-2016
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Assessee Lawyers: R VIJAYARAGHAVAN
• Section: 10(10D)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI , ! ' . #$ , % &' BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY, JUDICIAL MEMBER M.A.NO. 309/MDS/2016 (IN ITA NO. 1254/MDS/2016) / ASSESSMENT YEAR : 2007-08 SHRI ALLU ARAVIND BABU, 98, KAMDAR NAGAR, MAHALINGAPURAM, CHENNAI 600 034. PAN ADAPA 9507B (APPLICANT) V. THE ASSISTANT COMMISSIONER OF INCOME-TAX, NON CORPORATE CIRCLE-20(1), CHENNAI-34. ( RESPONDENT) APPLICANT BY : SHRI R. VIJAYARAGHAVAN, ADVOCATE RESPONDENT BY : SHRI A.V.SREEKANTH, JCIT / DATE OF HEARING : 06.01.2017 !' / DATE OF PRONOUNCEMENT: 09.02.2017 ( / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER BY THIS MISCELLANEOUS PETITION, THE ASSESSEE SEEK S RECALL OF THE ORDER OF THE TRIBUNAL IN ITA NO.1254/MDS/201 5 DATED 15.7.2016. - - MA 309/MDS/16 2 2. THE LD. AR SUBMITTED THAT THE ASSESSEE CAME IN APPEAL BEFORE THE TRIBUNAL RAISING VARIOUS GROUNDS FOR ADJ UDICATION AND THE ISSUE REGARDING KEY MAN INSURANCE POLICY, WHICH WAS NOT ADJUDICATED BY THE TRIBUNAL. THE LD. AR MADE A PR AYER THAT SECTION 10(10D) OF THE ACT AMENDED ONLY WITH EFFECT FROM 01.04.2014 TO SURRENDER VALUE OF ASSIGNED KEY MAN I NSURANCE POLICY, WHICH IS NOT APPLICABLE FOR THE IMPUGNED AS SESSMENT YEAR 2007-08 IN THE CASE OF THE ASSESSEE. HENCE, IT IS A MISTAKE APPARENT FROM THE RECORD. HE FURTHER SUBMITTED THA T THE TRIBUNAL WITHOUT CONSIDERING THE ABOVE ARGUMENT HELD AS UNDE R :- 16. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. LD.A.R RELIED ON THE JUDGEMENT OF CIT VS. RAJAN NANDA & ORD. REPORTED IN (2012) 349 ITR 008 W HEREIN HELD THAT THE PAYMENT WHICH IS RECEIVED BY EMPLOYEE UNDER KEY MAN INSURANCE POLICY, CAN BE TAXED IN THE HANDS OF EMPLOYEE U/S.17(3)(II) OF THE ACT. HOWEVER, WHERE NO SUCH AMOUNT WAS RECEIVED AT TIME OF ASSIGNMENT OF POLICY BY EMPLOYER COMPANY, AS EMPLOYEE, NOTHING COULD BE TAX ED IN ASSESSEES HANDS U/S.17(3)(II) OF THE ACT. FURTHER , ONCE THERE IS AN ASSIGNMENT OF KEY MAN INSURANCE POLICY BY EMP LOYER COMPANY TO EMPLOYEE, INSURANCE POLICY GETS CONVERTE D INTO AN - - MA 309/MDS/16 3 ORDINARY POLICY AND HENCE, IN THAT CASE, MATURITY V ALUE RECEIVED BY EMPLOYEE WOULD NOT BE SUBJECT O TAX IN VIEW OF SECTION 10(10D) OF THE ACT. IN OUR OPINION, THE ARG UMENT OF ASSESSEES COUNSEL IS TOTALLY MISPLACED THAT THE TW O INSURANCE POLICIES WERE TAKEN IN THE NAME OF MANAGING DIRECTO R OF THE ASSESSEE COMPANY I.E. PRESENT ASSESSEE FOR AMOUNTIN G TO ` 100 LAKHS EACH. THE SAID POLICY WAS ASSIGNED TO THE ASSESSEE ON 31.03.2006, AND THE SURRENDER THE VALUE OF THAT POLICY AMOUNTING TO ` 58,74,752/- WAS OFFERED AS INCOME AS PERQUISITE U/S. 17(3) OF THE ACT FOR ASSESSMENT YEA R 2006-07. SUBSEQUENTLY, WITHIN A SHORT TIME, THE SAID POLICY WAS ENCASHED AT ` 97,03,083/- ON 29.06.2006. IN OUR OPINION, THE DEVICE ADOPTED BY THE ASSESSEE BY ASSIGNING THE POL ICY AND ENCAHSING THE SAME IS NOTHING BUT COLORABLE DEVICE ADOPTED TO EVADE TAX AND WE DO NOT FIND ANY MERIT IN THE ARGUM ENT OF ASSESSEES COUNSEL. THE LD.CIT(A) HAS TAKEN THE C ORRECT VIEW OF THE FACTS OF THE CASE AND AS DISCUSSED BY THE CI T(A) IN PARA NOS. 9.1. TO 9.6, THE SAME IS CONFIRMED. THIS GROU ND OF APPEAL IS DISMISSED. - - MA 309/MDS/16 4 ACCORDING TO THE LD. AR, NOT CONSIDERING THE ABOVE ARGUMENT IS A MISTAKE APPARENT FROM THE ORDER OF THE TRIBUNAL AND THEREFORE, THE SAME IS RECALLED. 3. THE LD. DR, RELIED ON THE ORDER OF THE TRIBUNAL. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. THE ASSESSEE CAME IN APPEAL BEFORE THE TRIBUNAL WITH REGARD TO CONFIRMING THE ADDITION MADE IN RESP ECT OF SURRENDER VALUE OF KEY MAN INSURANCE POLICY AS INCO ME OF THE ASSESSEE AND HAS GIVEN A FINDING ON THIS ISSUE IN P ARA 16 AS DISCUSSED ABOVE. IN OUR OPINION, THE ORDER OF THE TRIBUNAL TO BE READ AS A WHOLE AND NOT IN A PIECEFUL MANNER AND THE TRIBUNAL HAS CONSIDERED THE ENTIRE FACTS AND CIRCUMSTANCES O F THE CASE AND SPECIFICALLY RECORDED THE ARGUMENTS IN PARA-5 O F ITS ORDER. NOW, LD.A.R WANTED TO RE-ARGUE THE CASE AND REVIEW THE ORDER OF THE TRIBUNAL FOR WHICH THE TRIBUNAL HAS NO POWER U/ S.254(2) OF THE ACT. THE ORDER OF THE TRIBUNAL TO BE READ IT I N WHOLE, NOT BY WORD BY WORD OR SENTENCE BY SENTENCE AS HELD BY SUP REME COURT IN THE CASE OF CIT, CALCUTTA VS. KARAM CHAN D THAPAR AND BROS. P. LTD. REPORTED IN [1989] 176 ITR 535 (S C). BEING SO, - - MA 309/MDS/16 5 WE ARE OF THE OPINION THAT THE TRIBUNAL AFTER CONSI DERING THE ENTIRE ARGUMENT OF THE ASSESSEE GIVEN FINDINGS ON T HIS ISSUE AND THERE IS NO INTERFERENCE CALLED FOR AT THIS STAGE. THE ARGUMENT OF THE ASSESSEE IS REJECTED. 5. IN THE RESULT, THE MISC. PETITION IS DISMISSED. ORDER PRONOUNCED ON 09 TH FEBRUARY, 2017 AT CHENNAI. SD/- SD/- ( # $ % . &' ()*+ ) ( ,-. / 0 1 ) ( DUVVURU RL REDDY ) (CHANDRA POOJARI) 899 :;9 /JUDICIAL MEMBER '( :;9/ACCOUNTANT MEMBER ,(8 /CHENNAI, A:- /DATED, THE 09 TH FEBRUARY, 2017. K S SUNDARAM %:(B CD'E/ FG(E /COPY TO: 1. F/+'HI /APPELLANT 2. CJ9HI /RESPONDENT 3. %9 %9 K (F/+') /CIT(A) 4. %9 %9 K /CIT 5. ELM+9 CN /DR 6. M* O' /GF.